A new report from Farmers National Company, one of the largest farm and ranch management and real estate companies in the country, said there are more potential buyers than sellers in the market.
That lack of balance between demand and supply is helping land markets remain relatively stable despite a downturn in the ag economy.
“Across the industry, land listings are down, on average, 25% from the active and accelerating value market experienced between 2020 and 2023,” the company said on Monday.
“The principle of supply and demand fits into the current land market, as many landowners understand the long-term appreciation of land value while providing an annual return on that investment.”
Farmers National Company said that this past fall alone, it marketed $223 million of land value for clients across the Midwest in the past three months.
The company said it conducted 123 sales in the fall months of 2024 through public auction. Real estate activity moving into the first quarter of 2025 “remains brisk,” FNC said, with an above-average level of auctions and traditional listings being negotiated.
“Despite the pressures created by lower net-farm income, declining commodity markets, higher interest rates and increased input costs, land values have remained quite stable across the Midwest,” Farmers National said in a news release.
“While most university and industry land value reports published at year’s end reflect a flat or slight downward trend compared to production expenses, the stability in those values reveals the resiliency of the land market and its ability to maintain the high values set over the past five years.”
Paul Schadegg, senior vice president of real estate operations at Farmers National, said farm operators continue to be the primary buyers of ag land and will continue to be through 2025.
“There are many factors for buyer motivation, but much of it can be explained by mindset translating to demand,” he said in a news release.
“Farm operators continue to be the primary buyers of ag land. Their mindset or motivation revolves around reinvesting in their farm enterprise, expanding operations and utilizing today’s farm equipment fully. Location of land offered for sale also plays a large role in their decision making, as often this land has not changed hands for generations and once sold, may not be sold again.”
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DTN